Sesa profit up on weakening rupee

SummaryIron ore miner and exporter Sesa Goa, part of the London-listed Vedanta Resources, improved its consolidated net profit before share in profit of associates for the second quarter of FY13 to R58 crore from R1 crore a year ago as it benefited from a weak rupee.

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Iron ore miner and exporter Sesa Goa, part of the London-listed Vedanta Resources, improved its consolidated net profit before share in profit of associates for the second quarter of FY13 to R58 crore from R1 crore a year ago as it benefited from a weak rupee.

However, the company’s net sales for the quarter fell 62% to R294 crore from R790 crore in the same quarter last year. “Lower sales volume on account of suspension of mining operations, transportation restrictions in Goa and continued mining suspension in Karnataka operations was offset by foreign exchange gains during Q2,” said the company in a statement.

Due to a mining ban imposed in Goa in September and a mining ban imposed in Karnataka in July 2011, Sesa Goa’s operations have come to a grinding halt.

The company’s production of saleable iron ore was down 63% to 0.4 million tonne from 1.1 million tonne in the same quarter last year. However, the company expects to produce 2.29 million tonne per annum of iron ore from Karnataka soon, with the mining ban being partially lifted.

Last month, the Supreme Court allowed some mines in Karnataka to resume mining operations, in line with recommendations of the Central Empowered Committee (CEC), and has now commenced the process for other mines including our mine in Karnataka,” the company said. “The CEC has approved our Reclamation and Rehabilitation plan at a provisional production capacity of 2.29 mtpa and we expect to commence mining in Karnataka, subject to receiving the court’s approval.”